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We continue to maintain our positive stance on construction companies, private sector banks and consumer facing businesses
30-Mar-2018 (17:48)
While managing allocation across debt funds, one could look at adding interest rate risk at earlier stages
28-Mar-2018 (15:44)

Mr.Murthy Nagarajan
In an interview with Anjali Raulgaonkar from Capital Market Publishers, Murthy Nagarajan, Head Fixed Income,Tata Asset Management said,In short-term funds, we focus on regular accruals and run a low duration strategy. On long term funds, we focus on active duration management.

Excerpts:

1.         What are your views on fixed income market? How have the yields moved and which direction you see them moving in near to mid-term and why? What will the key driving factors for yields?

We have a dovish policy bias because CPI is tracking 50bps lower than RBI's February policy projections and growth is on recovery path. We expect RBI to take cognizance of lower CPI, correction in base metals and other commodities except Brent and still negative output gap, in its upcoming monetary policy on April 5, 2018. Government had over-delivered on making the demand-supply dynamics favorable, this has led to a downward shift from 7.40%-7.80% earlier to 7.00%-7.50% (Currently trading at 7.30% post H1-2019 borrowing calendar announcement). Recent comments in media regarding FPI limit hike are giving mixed signals. Now that government has taken care of demand-supply balance, we expect RBI to be cautious in increasing the FPI limit (may not do so at all in April Policy). However, a gradual (slower than earlier envisaged) road-map for FPI limit hike cannot be ruled out.

2.         What is your strategy for short term funds? What is your exposure to long term funds and why?

In short-term funds, we focus on regular accruals and run a low duration strategy. On long term funds, we focus on active duration management. 

3.         Have you made any changes in your funds after the Union Budget 2018-19? What and Why?

Borrowing program and fiscal deficit were on higher side in the union budget. Fiscal slippage is never good for fixed income market. Further, the minimum support price (MSP) hike announced in budget was inflationary. Exact impact of MSP hike is difficult to envisage at current juncture but estimates vary from marginal to 90bps. We had reduced duration post budget and continued with low duration strategy in March.

4.         What is your advice to the investors?

Having fixed income allocation balances portfolio and provides stability. I think everyone needs to have some exposure to fixed income (debt funds). Like any other asset class, even debt funds have risk entailed, primarily interest rate risk and credit risk. While managing allocation across debt funds, one could look at adding interest rate risk at earlier stages and gradually switch this into regular accruals as age progresses. While managing such allocation, one should also keep in mind the broader cycles (macro factors have more bearing on debt funds) and avoid adding /reducing risk that is not commensurate to longer objectives.

Government sticking close to fiscal numbers will likely improve market sentiment
01-Feb-2018 (11:44)
The synchronous global growth, continuous reforms from government and earnings rebound in second half of fiscal augur well for markets
02-Jan-2018 (11:07)
We expect 10-year benchmark yields to remain in range of 7.10% to 7.40%
27-Dec-2017 (15:47)
We believe from hereon; stock performances would be a function of earnings growth
26-Dec-2017 (12:23)
We believe that over the long term there is a definite room to grow amongst global stagnancy
01-Oct-2017 (21:06)
Fixed income continues to be driven by both local and global events, though local factors have far more weightage
30-Sep-2017 (20:30)
With low probability of rate cuts, developments over fiscal deficit will drive the market in near term
06-Nov-2017 (11:38)
We suggest that investors looking to make a lump sum investment to stagger their investments
28-Oct-2017 (15:49)
We believe that there will be a long pause in RBI's rate action and this will lead to bond yields remaining in a very tight range in the near term
01-Sep-2017 (11:05)
We believe that Indian equity is a very promising asset class to invest in, over the medium term, despite the recent smart run up in the market
01-Aug-2017 (14:52)
One has to be selective in identifying the companies /sectors with high growth potential
05-Jul-2017 (18:30)
Match the investment horizon and risk appetite to the scheme selection
08-May-2017 (14:53)
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